Stocks drop as data feeds recession fears

By Ellis Mnyandu

NEW YORK (Reuters) - Stocks slid on Thursday as signs of regional weakness in manufacturing and poor corporate results fueled recession fears, causing investors to reduce risk and join a global equity sell-off.

Financial shares led Wall Street's losses and put the market on course to extend its rout a day after the benchmark S&P 500 had its worst tumble since the 1987 market crash.

"It's Just a matter of how bad the recession we're sliding into is going to be," said Manny Weintraub, managing director of Integre Advisors in New York.

The Dow Jones industrial average slid 275.50 points, or 3.21 percent, to 8,302.41. The Standard & Poor's 500 Index tumbled 31.13 points, or 3.43 percent, to 876.71. The Nasdaq Composite Index dropped 42.70 points, or 2.62 percent, to 1,585.63.

An index of factory activity in the Mid-Atlantic region fell to an 18-year low this month, the Philadelphia Federal Reserve Bank said.

Shares of Citigroup Inc tumbled more than 6 percent to $15.25 on the New York Stock Exchange after the banking company posted a $2.82 billion third-quarter loss.

Merrill Lynch , which is being bought by Bank of America, was down more than 4 percent at $17.52 after the securities firm posted a steeper-than-expected $7.5 billion third-quarter loss.

Shares of eBay Inc slumped nearly 10 percent to $13.82 a day after the online auction company gave a disappointing forecast and cited a widespread consumer spending slowdown that is expected to last into 2009.